EX-10.(j)








 CHANGE OF CONTROL AGREEMENT



FOR




Thomas Miller




THIS CHANGE OF CONTROL AGREEMENT (this “Agreement”), made as of December 3, 2004, is by and
among DNB FINANCIAL CORPORATION (“Holding Company”), DNB First, N.A., a national banking
association with principal offices at 4 Brandywine Avenue, Downingtown, PA 19335 (“Bank”) (Holding
Company and Bank are sometimes referred to individually and collectively herein as the “Company”)
and Thomas Miller, an individual residing at 114 Barton Drive, Spring City, PA 19475 (“Executive”).




Background



A. Company and Executive wish to enter into an agreement pursuant to which Company wishes to
secure the future services of Executive by providing Executive the severance payments provided in
this Agreement as additional incentive to induce Executive to devote Executive’s time and attention
to the interests and affairs of the Company.



B. Executive is willing to enter into this Agreement upon the terms and conditions herein set
forth.



C. The Boards of Directors of the Holding Company and the Bank have each approved this
Agreement and it is intended to be maintained as part of the official records of the Holding
Company and the Bank.



NOW THEREFORE, in consideration of the mutual promises and agreements set forth herein, the
parties agree as follows:



1. Employment. Except strictly to such extent (if any) as may be provided in another
agreement between Holding Company or Bank and Executive, Executive shall remain an employee at will
of the Company hereafter. This Agreement is not an employment agreement, but shall only be
interpreted as governing the payment of severance, which may be due to Executive upon termination
of Executive’s employment with Company under the specific circumstances described in this
Agreement. No provision of this Agreement shall be interpreted to derogate from the power of the
Company or its Board of Directors to terminate the employment of the Executive, subject
nevertheless to the terms of this Agreement.



2. Compensation. The compensation to be paid by Company to Executive from time to
time, including any fringe benefits or other employee benefits, shall not be governed by this
Agreement. This Agreement shall not be deemed to affect the terms of any stock options, employee
benefits or other agreements between the Company and Executive.



3. Severance Payments upon Termination of Employment After a “Change in Control”.
This Agreement does not govern any termination of Executive’s employment with Company which occurs
prior to a “change in control” as defined in subsection (e) of this Section. No inference shall be
drawn from any provision of this Section 3 concerning the rights and obligations of the parties in
connection with a termination of Executive’s employment prior to such a “change in control”.



(a) Termination by Company for Cause or Not for Cause. If Executive’s employment is terminated
by Company for “cause” (as defined in subsection (c) of this Section) at any time, or with or
without “cause” prior to a “change in control”, Executive shall have no right to any severance or
other payments under this Agreement due to such termination. If Executive is terminated by Company
or Holding Company after a “change in control” (as defined in subsection (e) of this Section) other
than for “cause”, Executive’s right to severance payments under this Agreement shall be as set
forth in subsection (f) of this Section. A termination by Company of Executive’s employment with
Bank only or Holding Company only shall be deemed a termination for purposes of this Agreement, and
Executive’s right to severance payments (if any) hereunder, shall be determined as if such
termination were a termination from employment with Company entirely.



(b) Termination by Executive for Good Reason or Not for Good Reason. If Executive terminates
Executive’s employment with Holding Company and Bank prior to a change in control, or without “good
reason” (as defined in subsection (d) of this Section) at any time, Executive shall have no right
to any severance or other payments under this Agreement due to such termination. If Executive
terminates Executive’s employment with Holding Company and Bank for “good reason” after a “change
in control” (as defined in subsection (e) of this Section), Executive’s right to severance payments
under this Agreement shall be as set forth in subsection (f) of this Section.



(c) Definition of “Cause”. For the purpose of this Agreement, termination for “cause” shall
mean termination for personal dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving personal profit, conviction of a felony, suspension or removal from office or
prohibition from participation in the conduct of Holding Company’s or Bank’s affairs pursuant to a
notice or other action by any Regulatory Agency, or willful violation of any law, rule or
regulation or final cease-and-desist order which in the reasonable judgment of the Board of
Directors of the Company will probably cause substantial economic damages to the Company, willful
or intentional breach or neglect by Executive of his duties, or material breach of any material
provision of this Agreement. For purposes of this paragraph, no act, or failure to act on
Executive’s part shall be considered “willful” unless done, or omitted to be done, by him without
good faith and without reasonable belief that this action or omission was in the best interest of
Company; provided that any act or omission to act by Executive in reliance upon an approving
opinion of counsel to the Company or counsel to the Executive shall not be deemed to be willful.
The terms “incompetence” and “misconduct” shall be defined with reference to standards generally
prevailing in the banking industry. In determining incompetence and misconduct, Company shall have
the burden of proof with regard to the acts or omission of Executive and the standards prevailing
in the banking industry.



(d) Definition of “Good Reason”. For purposes of this Agreement, Executive shall have “good
reason” for terminating his employment with Holding Company and Bank if Executive terminates such
employment within two (2) years after the occurrence of any one or more of the following events (a
“Triggering Event”) without Executive’s express written consent, but only if the Triggering Event
occurs within two (2) years after a “change in control” (as defined in subsection (e) of this
Section) of Bank or Holding Company: (i) the assignment to Executive of any duties inconsistent
with Executive’s positions, duties, responsibilities, titles or offices with Bank or Holding
Company as in effect immediately prior to a change in control of Bank or Holding Company, (ii) any
removal of Executive from, or any failure to re-elect Executive to, any of such positions, except
in connection with a termination or suspension of employment for cause, disability, death or
retirement, (iii) a reduction by Holding Company or Bank in Executive’s base annual salary as in
effect immediately prior to a change in control or as the same may be increased from time to time
thereafter, or the failure to grant increases in the Executive’s base annual salary on a basis at
least substantially comparable to the lowest increase granted to other officers of the Company
having the title of senior vice president or above, or (iv) any purported termination of
Executive’s employment with Bank or Holding Company when “cause” (as defined in this Agreement) for
such termination does not exist.



(e) Definition of “Change in Control”. For purposes of this Agreement, a “change in control”
of Company or Bank shall mean any one or more of the following:



(1) a change in control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934 (the
“Exchange Act”)(or any successor provision) as it may be amended from time to time;



(2) any “persons” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act in
effect on the date first written above), other than Company or Bank or any “person” who on the date
hereof is a director of officer of Company or Bank, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Company or
Bank representing 25% or more of the combined voting power of Company’s or Bank’s then outstanding
securities; or



(3) during any period of two (2) consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of Company or Bank cease for any reason to constitute at
least a majority thereof, unless the election of each director who was not a director at the
beginning of such period has been approved in advance by directors representing at least two-thirds
of the directors then in office who were directors at the beginning of the period.



(4) the signing of a letter of intent or a formal acquisition or merger agreement between the
Holding Company or Bank, of the one part, and a third party which contemplates a transaction which
would result in a “change of control” under paragraphs (1), (2) or (3) of this subsection (f), but,
as to any Triggering Event, only if such letter of intent or agreement, or the transaction
contemplated thereby, has not been canceled or terminated at the time the occurrence of the
Triggering Event in question.



(f) Severance. If Executive is entitled to severance payments under subsection (a) or (b) of
this Section, and if Executive shall have signed a release or releases as more fully described in
Section 4 of this Agreement, Company shall pay as severance to Executive the following:



(I) Base Severance. An amount equal to: (A) the annual base salary paid to the Executive and
includible in the Executive’s gross income for federal income tax purposes during the year in which
the date of termination occurs by Company and any of its subsidiaries subject to United States
income tax; multiplied by (B) 1.00. Such payment shall be made in a lump sum within one (1)
calendar week following the date of termination, subject to withholding by the Company as required
by applicable law and regulations. Notwithstanding any provision of this Agreement or any other
agreement of the parties, if the severance payment or payments under this Agreement, either along
or together with other payments which the Executive has the right receive from the Company, would
constitute a “parachute payment” (as defined in Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”) or any successor provision, such lump sum severance payment shall be
reduced to the largest amount as will result in no portion of the lump sum severance payment under
this Agreement being subject to the excise tax imposed by Section 4999 of the Code.



(II) Medical/Health Benefits. For a period of one (1) year from the date of termination of
the Executive’s employment with the Company, the Company shall continue to pay for Executive’s
health insurance, HMO or other similar medical provider benefits (excluding any disability plans or
benefits) on the same terms and conditions available to other employees from time to time.
Thereafter, if the Executive chooses to continue such medical/health benefits as provided under the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”), Executive must do so at Executive’s own
expense. If, at any time after the termination of Executive’s employment with the Company,
Executive becomes covered for medical/health benefits on any terms with a new employer, the Company
shall thereafter have no obligation to pay for any benefits or coverage and the Company’s COBRA
obligations shall terminate to the extent permitted by COBRA. Executive agrees to immediately
notify Company, in writing, upon Executive’s acceptance of new employment which provides
medical/health benefits for which Executive is eligible.



(g) Any termination of Executive’s employment by Company or by Executive shall be communicated
by a dated, written notice, signed by the party giving the notice, which shall (A) indicate the
specific termination provision in this Agreement relied upon; (B) set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of Executive’s employment
under the provision so indicated; (C) specify the effective date of termination.



(h) All obligations under this Agreement are subject to termination by any bank regulatory
agency having jurisdiction over Holding Company or Bank (“Regulatory Agency”) in accordance with
any applicable provisions of law or regulations granting such authority, but rights of the
Executive to compensation earned as of the date of termination shall not be affected.



(i) Executive shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise. The severance payments provided for in this
Agreement shall not be reduced by any compensation or other payments received by Executive after
the date of termination of Executive’s employment from any source.



4. Execution of Release Required. Executive agrees that, as a precondition to
receiving the payments provided for in this Agreement, Executive shall have executed and delivered
to Holding Company and Bank a release or releases, in form satisfactory to Holding Company and
Bank, releasing all claims which Executive may then have against Holding Company or Bank, including
without limitation any claims related to employment, termination of employment, discrimination,
harassment, compensation or benefits, but excluding any claims for payments due or to become due
under this Agreement.



5. Payment Obligations Absolute. Provided that the preconditions for payment set
forth in this Agreement are fully satisfied, Company’s obligation to pay Executive the severance
payments provided herein shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, any set-off counter claim, recoupment, defense or
other right which Company may have against Executive. All amounts payable by Company hereunder
shall be paid without notice or demand.



6. Continuing Obligations. Executive shall retain in confidence any confidential
information known to him concerning Company and its business so long as such information is not
publicly disclosed.



7. Amendments. No amendments to this Agreement shall be binding unless in a writing,
signed by both parties, which states expressly that it amends this Agreement.



8. Notices. Notices under this Agreement shall be deemed sufficient and effective if
(i) in writing and (ii) either (A) when delivered in person or by facsimile, telecopier, telegraph
or other electronic means capable of being embodied in written form or (B) forty-eight (48) hours
after deposit thereof in the U.S. mails by certified or registered mail, return receipt requested,
postage prepaid, addressed to each party at such party’s address first set forth above and, in the
case of Company, to the attention of the Chairman of the Board, or to such other notice address as
the party to be notified may have designated by written notice to the sending party.



9. Prior Agreements. There are no other agreements between Company and Executive
regarding Executive’s employment. This Agreement is the entire agreement of the parties with
respect to its subject matter and supersedes any and all prior or contemporaneous discussions,
representations, understandings or agreements regarding its subject matter.



10. Assigns and Successors. The rights and obligations of Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of
Company and Executive, provided, however, that Executive shall not assign or anticipate any of his
rights hereunder, whether by operation of law or otherwise. For purposes of this Agreement,
“Company” shall also refer to any successor to Holding Company or Bank, whether such succession
occurs by merger, consolidation, purchase and assumption, sale of assets or otherwise.



11. Executive’s Acknowledgment of Terms. Executive acknowledges that he has read
this Agreement fully and carefully, understands its terms and that it has been entered into by
Executive voluntarily. Executive acknowledges that any payments to be made hereunder will
constitute additional compensation to Executive. Executive further acknowledges that Executive has
had sufficient opportunity to consider this Agreement and discuss it with Executive’s own advisors,
including Executive’s attorney and accountants. Executive has been informed that Executive has the
right to consider this Agreement for a period of at least twenty one (21) days prior to entering
into it. Executive acknowledges that Executive has taken sufficient time to consider this
Agreement before signing it. Executive also acknowledges that Executive has the right to revoke
this Agreement for a period of seven (7) days following this Agreement’s execution by giving
written notice of revocation to Company.



IN WITNESS WHEREOF, the parties hereto have caused the due execution of this Agreement as of
the date first set forth above.



	 	 	 
	
 
	 	Holding Company:
	Attest:

	 	DNB FINANCIAL CORPORATION
	 
	 	 
	   

Secretary

	 	By:   

President
	 
	 	 
	
 
	 	Bank:
	Attest:

	 	DNB First, N.A.
	 
	 	 
	   

Secretary

	 	By:   

President
	 
	 	 
	Witness:

	 	Executive:
	 
	 	 
	   

	 	   /s/ Thomas Miller   
	
 
	 	 







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